Pacific Investment Management Co.’s Total Return Fund increased its stake in U.S. government debt to a 25-month high in July as rally in Treasuries pushed yields to an all-time low and then fizzled.

Treasuries and related securities accounted for 45.6 percent of assets, rising from 39.7 percent in June, according to PIMCO’s monthly holdings reports on its website. The figure is the highest since June 2014. Total Return, based in Newport Beach, California, is the world’s biggest actively run bond fund with $86.8 billion in assets.

U.S. government securities have slumped since 10-year yields reached the record-low 1.318 percent on July 6 as traders revive bets the Federal Reserve will consider raising interest rates in the first quarter of 2017. Demand from abroad is helping support the market as investors seek alternatives to negative yields in Japan and Germany. The U.S. is scheduled to sell 10-year notes Wednesday and 30-year bonds Thursday after demand rose at a three-year auction Tuesday.

‘Real Driver’

“The real driver in the Treasury market has been the negative yield policies and the collapse in yields in Europe and Japan, and that’s a very powerful force holding down U.S. yields,” Richard Clarida, PIMCO’s global strategic adviser, said Aug. 8 on Bloomberg Television. “I don’t see that abating in the near term.”

U.S. 10-year note yields declined two basis points to 1.53 percent as of 6:04 a.m. in London, Bloomberg Bond Trader data show. The price of the 1.625 percent security due in May 2026 rose 1/8, or $1.25 per $1,000 face amount, to 100 26/32.

Total Return bought U.S. government debt for a third month in July. Bonds surged in June as the U.K. vote that month to leave the European Union sparked a global debt-market rally. The rally peaked on July 6, and the yield has since climbed after a stronger-than-expected U.S. employment report revived forecasts for a Fed rate increase.

The fund has returned 4.1 percent over the past year, lagging behind about 70 percent of its peers, based on data compiled by Bloomberg. Its stake in government securities can include Treasuries and related investments such as inflation-protected bonds, futures contracts and agency debt, according to PIMCO”s website.

Futures traders see 52 percent odds of higher U.S. rates by March compared with 42 percent a week ago, according to data compiled by Bloomberg.

“Yields will not increase so much,” said Yoshiyuki Suzuki, the head of fixed income in Tokyo at Fukoku Mutual Life Insurance Co., which has about $64.2 billion in assets. “I always say I want 10-year yields of 2 percent. But it’s very difficult” to achieve, he said.